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House of Commons Hansard
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Written Statements
10 December 2018
Volume 651

Written Statements

Monday 10 December 2018

Business, Energy and Industrial Strategy

Limited Partnership Law

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The Government have published their response to their consultation on the reform of limited partnership law.

A key theme of the UK’s industrial strategy is ensuring the UK has a world-leading business environment, which holds the confidence of investors, employees, consumers and the public. An important element of this is the provision of a range of business structures through which a variety of commercial objectives can be achieved.

Limited partnerships play an important role in private fund structures used by private equity, real estate and infrastructure managers. In recent years however it has been reported that limited partnerships in some circumstances have been used for illicit purposes. The Government recognise that robust action is required.

The reforms set out in the Government’s response include: tightening of registration requirements for limited partnerships, ensuring that those applying to register limited partnerships demonstrate that they are registered and supervised by an official anti-money laundering supervisor; requiring limited partnerships to demonstrate a firmer connection to the UK; increasing transparency requirements; and enabling the Registrar to strike from the companies register limited partnerships which are dissolved or which are no longer carrying on business.

The Government have worked closely with industry in developing these reforms and considers that they strike the right balance between preventing the abuse of limited partnerships while ensuring they remain attractive to legitimate commercial activity.

The reforms require primary legislation and the Government will legislate when parliamentary time allows.

The Government response will be deposited in the Libraries of both Houses.

[HCWS1160]

Treasury

Anti-money Laundering and Counter-terrorism Financing regime

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The UK is one of the world’s largest and most open economies, and a leading global financial centre. That brings it with the heightened risk of illicit financial flows from money laundering and terrorist financing. The Government are committed to tackling the threat that this presents to our security and prosperity. The Government have taken robust action over recent years to clamp down on illicit finance, protecting our citizens and helping legitimate businesses to thrive.

The Financial Action Task Force (FATF) is the global standard setter for anti-money laundering and counter-terrorist financing (AML/CTF). The FATF published its mutual evaluation report of the United Kingdom on Friday 7 December. The report recognises that the UK’s AML/CTF regime is the strongest of the over 60 countries assessed by FATF and its regional bodies to date.

The UK received the highest rating possible in four out of the 11 areas of the report, and received a rating of “substantial” in a further four areas. In particular, the report highlights the UK’s efforts on:

Taking significant steps to understand and coordinate the UK’s response to the threat of illicit finance, including publishing two national risk assessments in 2015 and 2017;

Working with international partners to tackle illicit finance, through a strong legal framework and a liaison network spanning over 160 jurisdictions;

Aggressively investigating and prosecuting money laundering, with over 1,400 convictions a year, and adopting new tools such as unexplained wealth orders;

Using all available measures to disrupt terrorist financing, including criminal justice measures, confiscating funds, and financial sanctions;

Preventing the misuse of companies and trusts, and acting as a global leader by adopting a public register of company beneficial ownership and a register of trusts with tax consequences;

Promoting effective global use and implementation of financial sanctions against terrorists and against proliferation of weapons of mass destruction;

The Government recognise that there is more to be done and is progressing with a series of measures to redouble its fight against economic crime.

The National Economic Crime Centre (NECC), housed within the National Crime Agency, has recently been launched. Tasked with co-ordinating the national response to economic crime, the NECC will ensure operations achieve the greatest sustained impact on threats the UK faces, and will lead a new approach to economic crime in the UK.

In line with this, the UK will take forward its ambitious reform of the suspicious activity reporting regime. This will provide an improved IT system to help the UK’s Financial Intelligence Unit (UKFIU) process, analyse and distribute the nearly 500,000 SARs received annually by UKFIU, and will also drive up the quality and use of SARs across the UK’s system. The NCA is increasing the staffing of the UKFIU by more than 30% this year, with further increases envisaged in future years.

The Government plan to legislate in 2019 to introduce a register of beneficial ownership for overseas entities which own or purchase UK property, which is being developed by the Department for Business, Energy and Industrial Strategy (BEIS). The Government also plan to take further action to mitigate the risks presented by the misuse of limited partnerships, in line with the consultation response published today by BEIS. In addition, BEIS will look further at controls over who registers companies in the UK, what information they have to provide, and how assurance is provided over that information.

The 2017 National Risk Assessment noted the steps that UK supervisors are taking to strengthen their approaches and collaboration in the fight against illicit finance. Complementing this ongoing work, the Government launched the office for professional body AML supervision (OPBAS) earlier this year, which will continue its work with supervisors to help improve standards and consistency across the UK’s regime.

The FATF report underlines where more work can be done and will help to focus these efforts over the coming years. The Government are considering the recommendations in the report and will publish their response to these in due course.

A copy of the report has been deposited in the Libraries of both House.

[HCWS1162]

Defence

Type 31e Frigate

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I am pleased to inform the House that the Ministry of Defence (MOD) has taken a major step forward in the competition to build five Type 31e frigates.

On 10 December 2018 the MOD awarded three contracts for the competitive design phase. The contracts have been awarded to consortia led by BAE Systems, Babcock and Atlas Elektronik UK and are valued at up to £5 million each.

The competitive design phase is the first stage of the design process which will allow suppliers to demonstrate how they can deliver the Royal Navy’s threshold capability by the target date and within budget. These contracts will fund industry to prepare detailed proposals for the design and build of the five Type 31e frigates.

Concurrent with the award of the competitive design phase contracts, the MOD has issued to each consortium an invitation to negotiate for the single design and build contract that we intend to place by the end of 2019. Conducting the competitive design phase in parallel with the design and build contract negotiations will allow the award of the design and build contract earlier than would be normally be the case in a major procurement.

It remains our intention to seek a firm price contract for five ships, less an amount of Government furnished equipment, for £1.25 billion, giving an average price of £250 million per ship. We want the first ship in 2023, with all five ships delivered by the end of 2028. The Government remain committed to a surface fleet of at least 19 frigates and destroyers.

This contractual milestone is a tangible and positive result of the national shipbuilding strategy published in September 2017. The strategy sets out how the Government intend to work with industry to develop a strong and globally competitive UK shipbuilding and marine engineering sector. The Type 31e procurement is seeking to maximise the UK prosperity and export potential, without compromising on cost and time.

The award of the competitive design phase contracts is a testament to the MOD’S positive engagement with industry and the commitment to move the programme forward.

[HCWS1161]

Exiting the European Union

General Affairs Council, December 2018

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Lord Callanan, Minister of State for Exiting the European Union, has made the following statement:

I will attend the General Affairs Council in Brussels on 11 December 2018 to represent the UK. Until we leave the European Union, we remain committed to fulfilling our rights and obligations as a full member.

The provisional agenda includes:

Multiannual financial framework 2021-2027

Ministers will discuss progress on the multiannual financial framework (MFF) proposals with the presidency which should ensure that leaders will be in a position to discuss the MFF at the European Council meeting in December.

Eighteen-month programme of the Council

Ministers will endorse the eighteen-month work programme of the incoming trio of the presidencies of Romania, Finland and Croatia. The programme will set out the Council of the European Union’s activities from 1 January 2019 to 30 June 2020.

Preparation of the European Council on 13-14 December 2018 and European Council follow-up

The Council will discuss the draft conclusions for the December European Council. The conclusions are expected to cover the multiannual financial framework, the single market, migration and external relations. The presidency will provide Ministers with an update on progress in implementing previous European Council conclusions.

Outcome on the conference on subsidiarity on 15-16 November 2018

The presidency will provide information on the outcome of the conference on subsidiarity. In those areas which do not form part of the EU’s exclusive competence, the principle of subsidiarity means that action should only be taken at EU level when the desired objectives cannot be effectively achieved by action taken at national or regional level.

Rule of law in Poland—article 7(1) TEU reasoned proposal

The Council is expected to hold a third hearing under article 7(1) TEU on the rule of law in Poland.

Values of the UnionHungary / Article 7(1) TEU reasoned proposal

Ministers will discuss the article 7(1) procedure in relation to Hungary.

European semester 2019—annual growth survey

The Commission will present the results from the annual growth survey which will support the strengthening of economic policies across the EU.

[HCWS1164]

Housing, Communities and Local Government

Rough Sleeping

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Following the publication of the Government’s Rough Sleeping Strategy on 13 August this year, on Saturday I published a delivery plan setting out the progress made so far on tackling rough sleeping, and further detail on how we intend to deliver the 61 commitments made in the strategy. I have also announced our plans for the remaining £11 million of the 2019-20 Rough Sleeping Initiative funding, which will be targeted at local authorities not funded through the Rough Sleeping Initiative this year.

Delivery plan

The Rough Sleeping Strategy is a £100 million package of commitments focused around prevention, intervention and recovery: introducing necessary policies and programmes to help those who find themselves on the streets today, and laying the groundwork for our 2027 vision in which rough sleeping is prevented and those who do find themselves at crisis point are quickly supported into settled accommodation with appropriate support. It is a cross-Government effort, with contributions from seven Departments, all focused on achieving our commitment to halve rough sleeping by 2022 and end it by 2027.

The delivery plan sets out detailed progress on many of the key commitments made in the strategy, including our new rapid rehousing pathway, which brings together funding for new specialist navigators, local lettings agencies, supported lettings, and our new Somewhere Safe to Stay rapid assessment hubs. It provides an update on ongoing work such as the Rough Sleeping Initiative and the three Government-backed Housing First pilots. It sets out key milestones and expected delivery dates for each of the 61 commitments made, and also highlights just a few of the projects we have funded, and people we have already helped.

The delivery plan sets out further detail on the expert adviser team we have put in place to deliver the Rough Sleeping Initiative, with combined experience across central and local government, housing associations, frontline services and the voluntary sector. Since their appointment this summer, our specialist advisers have been working closely with local authorities and visiting them regularly, supporting them to mobilise funding and get new projects up and running. The Rough Sleeping Initiative advisers will continue to work closely with local authorities over the coming months to monitor and maximise the impact of the initiative, as well as feeding back the challenges faced on the ground, enabling us to be responsive to changing circumstances.

In the strategy, we were clear that the work set out thus far is the first step towards achieving our goal, and as such committed to publishing an annual update to the strategy. In this delivery plan, we confirm that this annual update will comprise an update on progress, detail of any new programmes or policies we are bringing forward, and an updated delivery plan for the coming year.

Further £11 million for the 2019-20 Rough Sleeping Initiative

In the strategy we announced £45 million of funding for the Rough Sleeping Initiative next year, in addition to the £30 million funding provided this year. In September we provisionally allocated £34 million of that funding to the areas who have been part of the initial phase of the Rough Sleeping Initiative. The remaining £11 million will be focused on those areas which have not yet been funded through the Rough Sleeping Initiative, which can demonstrate that they are developing partnerships, plans and effective interventions to achieve the goal of reducing the numbers of people sleeping on the streets of their area. Local authorities that already receive Rough Sleeping Initiative funds could apply only as part of a partnership bid across local authorities.

The Rough Sleeping Initiative will have direct oversight of how this funding is delivered. This tailored approach will ensure interventions are planned on the basis of need, the existing provision and service gaps in each area and that funding is directed to the places where it will have most impact.

The types of interventions we expect to fund include increased outreach provision, floating support, and accommodation options to help rough sleepers off the street.

Over the next few weeks, local authorities will submit initial bids and the expert Rough Sleeping Initiative adviser team will then help to refine proposals before final bids are submitted in February.

[HCWS1166]

International Development

Global Compact for Migration

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I am writing to update the House on the UK’s endorsement of the global compact for safe, orderly and regular migration, which we will announce at the intergovernmental launch event in Marrakesh on 10 December.

Overview

Well-managed migration is in everyone’s interests. But uncontrolled migration erodes public confidence, damages economies, and places people on the move in situations of great vulnerability. The UK is taking significant steps, including with our ODA-funded programming, to tackle uncontrolled migration by:

Addressing the root causes of migration, through our targeted assistance for livelihoods, healthcare, education and economic development;

Tackling modern slavery and organised immigration crime;

Supporting enhanced border management overseas;

Providing critical humanitarian support and protection for vulnerable migrants, as well as offering voluntary return and vital reintegration support to those wishing to return home; and

Supporting refugees to stay in a first safe country through our humanitarian and development

work in Africa, the Middle East and Asia.

The global compact for migration embeds these efforts within the international system and enhances co-operation between states whilst reaffirming the sovereign right of all countries to control their own borders. The compact is not legally binding. It creates a framework to allow countries to work together to make global migration more beneficial for everyone.

UK endorsement of the global compact for migration

On 10 December, the UK will endorse the global compact for migration (GCM) at the intergovernmental launch event in Marrakesh.

The migration compact marks a major milestone for the international community. No country can address the challenges presented by illegal migration on its own and an agreement on this scale, with the overwhelming support of the international community including endorsements from 165 other UN member states including France, Germany, Canada and Japan, highlights the need for global co-operation.

The compact will not, and is not intended to, affect our continued ability to determine and implement our own migration policy in our national interest. The compact will not in any way create legal obligations for states, nor does it seek to establish international customary law or further interpret existing treaties or national obligations. It protects every country’s right to determine its own immigration policies, including in areas such as asylum, border controls and returns of illegal migrants. The GCM emphasises that migrants are entitled to the same universal human rights as any human being, and does not create any new “rights” for migrants. As a result, the UK does not interpret the compact as being in conflict with its current domestic policies. At the same time, the compact will help us take important steps to keep migrants around the world safe and to protect the most vulnerable, domestically and overseas, who can become victims of modern slavery. The compact also sets out actions to harness the economic benefits of safer, regular migration, for example by reducing the costs of remittances that migrants send home.

I believe the end result serves the UK’s national interest. The Prime Minister set out the UK’s priorities for global migration reform in 2016 and, taken together, the refugee compact and the migration compact help embed these priorities into global migration governance. In practice, that means a refugee compact that helps ensure refugees can claim asylum in the first safe country they reach. And a migration compact which makes a clear distinction between refugees and migrants, and which sets out a well-managed global migration system confirming the sovereign right of States to control their borders and the clear responsibility of states to accept the return of their nationals who no longer have the right to remain elsewhere.

It also includes proposals which will help the UK make a strong contribution to the delivery of the global sustainable development goals, including through our ODA-funded programming. This includes those relating to orderly, safe, regular and responsible migration and mobility of people; and those intended to eradicate forced labour, modern slavery and human trafficking, and child labour.

Next steps

After the political launch in Marrakesh, the document will need to be adopted by the UN General Assembly in New York. As part of this process, the UK will issue an explanation of position, alongside likeminded EU member states which will publicly capture the UK’s interpretation of the text.

[HCWS1163]

Transport

Crossrail

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The Government, the Mayor of London and Transport for London (TfL) have today 10 December 2018 confirmed a financing package to deliver the final stages of the Crossrail project and open the Elizabeth line to passengers.

Crossrail Ltd, a wholly owned subsidiary of TfL, announced in August 2018 that the opening of the Elizabeth line through central London would be delayed. Work is ongoing to identify the remaining works required to complete the infrastructure and then commence the extensive testing necessary to ensure the railway opens safely and reliably. Crossrail is a nationally significant infrastructure project which will add up to £42 billion to the UK economy and will transform travel in, to, and across London.

The Government remain committed to the rapid completion of the project, in a way that is fair to UK taxpayers, and that enables London—as the primary beneficiary of Crossrail—to bear the additional costs. Independent reviews into Crossrail Ltd’s assessment of ongoing funding requirements and governance arrangements are being undertaken by KPMG to ensure the right scrutiny and oversight are in place as the project enters its final phase.

The emerging findings of the KPMG reviews into Crossrail Ltd’s finances indicate the likely range of additional capital cost due to the delayed opening of the central section could be in the region of between £1.6 billion and £2 billion. That includes the £300 million already contributed by the Department for Transport and TfL in July 2018, leaving between £1.3 billion and £1.7 billion to cover the predicted additional costs of the project.

The Government, the Mayor of London and TfL have agreed a financial package to cover this. The Department for Transport will provide a loan of up to £1.3 billion to the Greater London Authority (GLA). The GLA intend to repay this loan via London’s Business Rate Supplement (BRS) and from the Mayoral Community Infrastructure Levy (MCIL). The GLA will also provide a £100 million cash contribution, taking its total contribution for this package to £1.4 billion.

As the final costs of the Crossrail project are yet to be confirmed, a contingency arrangement has also been agreed between TfL and the Department for Transport. The Department for Transport will loan TfL up to £750 million in the event that further finance is required for the project.

This combined financing deal will replace the need for the £350 million interim financing package announced by the Department for Transport in October 2018.

The combined total of the financing arrangements outlined above, means that the overall funding envelope for the project is now £17.6 billion.

Crossrail Ltd appointed Mark Wild as CEO on 19 November 2018. Mark is now conducting an extensive review of the remainder of the programme and will provide clarity in the New Year on the opening date of future phases. Crossrail Ltd are working to establish a robust and deliverable schedule to open a safe and reliable railway. This will also provide greater clarity on the level of additional funding required.

Furthermore, both the Department for Transport and TfL have recommended to the Crossrail Ltd Board that they appoint Tony Meggs as Chair. Tony Meggs was previously chief executive of the infrastructure and projects authority and Head of Government’s project delivery function, following a 30 year career in the private sector leading major projects at global, regional and local levels.

To further strengthen the Crossrail Ltd Board, the Department for Transport have accepted TfL’s nomination of Nick Raynsford as Deputy Chair. Nick is a former MP and served as Minister for London on two occasions between 1997 and 2003.

[HCWS1165]